Boeing 777 Group Case Study
Assuming the perspective of your role, consider how you would address the following case study questions:
1. What are the key issues surrounding this case?
2. What is the nature of the problems that exist?
3. Identify opportunities that may be involved.
4. In what ways were problems resolved or leveraged?
5. Recommend and justify additional courses of action that are most likely to be effective.
Student 4 - Executive SponsorJob responsibilities: Championing the project at the executive level to secure buy-in.
After reading the case study in the PDF file attached separately, answer the 5 questions above from an Executive Sponsor perspective.
50 Words for each answer.
Boeing 777 Group Case Stud
y
Assuming the perspective of your role, consider how you would address the
following case study questions:
1.
Wha
t are the key issues surrounding this case?
2.
What is the nature of the problems that exist?
3.
Identify opportunities that may be involved.
4.
In what ways were problems resolved or leveraged?
5.
Recommend and justify additional courses of action that are most likel
y to
be effective.
S
tudent 4
-
Executive Sponso
r
Job responsibilities: Championing the project at the executive level to secure buy
-
in
.
After reading the case study in the PDF file attached
separately, answer the 5 questions above from an
Executive
Sponsor
perspective
.
50 Words for each answer.
Boeing 777 Group Case Study
Assuming the perspective of your role, consider how you would address the
following case study questions:
1. What are the key issues surrounding this case?
2. What is the nature of the problems that exist?
3. Identify opportunities that may be involved.
4. In what ways were problems resolved or leveraged?
5. Recommend and justify additional courses of action that are most likely to
be effective.
Student 4 - Executive Sponsor
Job responsibilities: Championing the project at the executive level to secure buy-in.
After reading the case study in the PDF file attached
separately, answer the 5 questions above from an Executive
Sponsor perspective.
50 Words for each answer.
Following his promotion to Boeing CEO in 1988, Frank Shrontz looked for ways
to stretch and upgrade the Boeing 767—an eight-year-old wide-body twin jet—
in order to meet Airbus competition. Airbus had just launched two new 300-seat
wide-body models, the two-engine A330 and the four-engine A340. Boeing had
no 300-seat jetliner in service, nor did the company plan to develop such a jet.
To find out whether Boeing’s customers were interested in a double-decker
767, Philip Condit, Boeing Executive Vice President and future CEO (1996) met
with United Airlines Vice President Jim Guyette. Guyette rejected the idea out-
right, claiming that an upgraded 767 was no match to Airbus’s new model trans-
ports. Instead, Guyette urged Boeing to develop a brand new commercial jet, the
most advanced airplane of its generation.1 Shro ...
Boeing 777 Group Case StudyAssuming the perspective of your ro.docx
1. Boeing 777 Group Case Study
Assuming the perspective of your role, consider how you would
address the following case study questions:
1. What are the key issues surrounding this case?
2. What is the nature of the problems that exist?
3. Identify opportunities that may be involved.
4. In what ways were problems resolved or leveraged?
5. Recommend and justify additional courses of action that are
most likely to be effective.
Student 4 - Executive SponsorJob responsibilities: Championing
the project at the executive level to secure buy-in.
After reading the case study in the PDF file attached separately,
answer the 5 questions above from an Executive Sponsor
perspective.
50 Words for each answer.
Boeing 777 Group Case Stud
y
Assuming the perspective of your role, consider how you would
address the
following case study questions:
1.
Wha
t are the key issues surrounding this case?
2.
What is the nature of the problems that exist?
2. 3.
Identify opportunities that may be involved.
4.
In what ways were problems resolved or leveraged?
5.
Recommend and justify additional courses of action that are
most likel
y to
be effective.
S
tudent 4
-
Executive Sponso
r
Job responsibilities: Championing the project at the executive
level to secure buy
-
in
.
After reading the case study in the PDF file attached
separately, answer the 5 questions above from an
Executive
Sponsor
perspective
.
50 Words for each answer.
3. Boeing 777 Group Case Study
Assuming the perspective of your role, consider how you would
address the
following case study questions:
1. What are the key issues surrounding this case?
2. What is the nature of the problems that exist?
3. Identify opportunities that may be involved.
4. In what ways were problems resolved or leveraged?
5. Recommend and justify additional courses of action that are
most likely to
be effective.
Student 4 - Executive Sponsor
Job responsibilities: Championing the project at the executive
level to secure buy-in.
After reading the case study in the PDF file attached
separately, answer the 5 questions above from an Executive
Sponsor perspective.
50 Words for each answer.
Following his promotion to Boeing CEO in 1988, Frank Shrontz
looked for ways
to stretch and upgrade the Boeing 767—an eight-year-old wide-
body twin jet—
in order to meet Airbus competition. Airbus had just launched
two new 300-seat
wide-body models, the two-engine A330 and the four-engine
A340. Boeing had
no 300-seat jetliner in service, nor did the company plan to
develop such a jet.
To find out whether Boeing’s customers were interested in a
double-decker
4. 767, Philip Condit, Boeing Executive Vice President and future
CEO (1996) met
with United Airlines Vice President Jim Guyette. Guyette
rejected the idea out-
right, claiming that an upgraded 767 was no match to Airbus’s
new model trans-
ports. Instead, Guyette urged Boeing to develop a brand new
commercial jet, the
most advanced airplane of its generation.1 Shrontz had heard
similar suggestions
from other airline carriers. He reconsidered Boeing’s options,
and decided to
abandon the 767 idea in favor of a new aircraft program. In
December 1989,
accordingly, he announced the 777 project and put Philip Condit
in charge of its
management. Boeing had launched the 777 in 1990, delivered
the first jet in 1995,
and by February 2001, 325 B-777s were flying in the services of
the major inter-
national and U.S. airlines.2
Philip Condit and
the Boeing 777:
From Design and
Development to
Producton and
Sales*
97
*This case was presented by Isaac Cohen, San Jose State
University, at the 2000 North American Case
Research Association (NACRA) workshop. Reprinted by
permission from the Case Research Journal.
Copyright 2000 by Isaac Cohen and the North American Case
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Condit faced a significant challenge in managing the 777
project. He wanted
to create an airplane that was preferred by the airlines at a price
that was truly
competitive. He sought to attract airline customers as well as
cut production costs,
7. and he did so by introducing several innovations—both
technological and man-
agerial—in aircraft design, manufacturing, and assembly. He
looked for ways to
revitalize Boeing’s outmoded engineering production system,
and update
Boeing’s manufacturing strategies. And to achieve these goals,
Condit made con-
tinual efforts to spread the 777 program-innovations
companywide.
Looking back at the 777 program, this case focuses on Condit’s
efforts. Was
the 777 project successful, and was it cost effective? Would the
development
of the 777 allow Boeing to diffuse the innovations in airplane
design and pro-
duction beyond the 777 program? Would the development of the
777’s permit
Boeing to revamp and modernize its aircraft manufacturing
system? Would the
making and selling of the 777 enhance Boeing competitive
position relative to
Airbus, its only remaining rival?
THE AIRCRAFT INDUSTRY
Commercial aircraft manufacturing was an industry of enormous
risks where fail-
ure was the norm, not the exception. The number of large
commercial jet makers
had been reduced from four in the early 1980s—Boeing,
McDonnell Douglas,
Airbus, and Lockheed—to two in late 1990s, turning the
industry into a duopoly,
and pitting the two survivors—Boeing and Airbus—one against
8. the other. One
reason why aircraft manufacturers so often failed was the huge
cost of product
development.
Developing a new jetliner required an up-front investment of up
to $15 bil-
lion (2001 dollars), a lead time of five to six years from launch
to first delivery,
and the ability to sustain a negative cash flow throughout the
development phase.
Typically, to break even on an entirely new jetliner, aircraft
manufacturers needed
to sell a minimum of 300 to 400 planes and at least 50 planes
per year.3 Only a
few commercial airplane programs had ever made money.
The price of an aircraft reflected its high development costs.
New model
prices were based on the average cost of producing 300 to 400
planes, not a single
plane. Aircraft pricing embodied the principle of learning by
doing, the so called
learning curve4: workers steadily improved their skills during
the assembly
process, and as a result, labor cost fell as the number of planes
produced rose.
The high and increasing cost of product development prompted
aircraft man-
ufacturers to utilize subcontracting as a risk-sharing strategy.
For the 747, the 767,
and the 777, the Boeing Company required subcontractors to
share a substantial
part of the airplane’s development costs. Airbus did the same
with its own
11. and equipment,
assembled the entire plane, marketed it, and provided customer
support for twenty
to thirty years. Both the airframe integrators and their
subcontractors were sup-
plied by thousands of domestic and foreign aircraft components
manufacturers.5
Neither Boeing, nor Airbus, nor any other post-war commercial
aircraft man-
ufacturer produced jet engines. A risky and costly venture,
engine building had
become a highly specialized business. Aircraft manufacturers
worked closely
with engine makers—General Electric, Pratt and Whitney, and
Rolls Royce—to
set engine performance standards. In most cases, new airplanes
were offered with
a choice of engines. Over time, the technology of engine
building had become so
complex and demanding that it took longer to develop an engine
than an aircraft.
During the life of a jetliner, the price of the engines and their
replacement parts
was equal to the entire price of the airplane.6
A new model aircraft was normally designed around an engine,
not the other
way around. As engine performance improved, airframes were
redesigned to exploit
the engine’s new capabilities. The most practical way to do so
was to stretch the fuse-
lage and add more seats in the cabin. Aircraft manufacturers
deliberately designed
flexibility into the airplane so that future engine improvements
could facilitate later
12. stretching. Hence the importance of the “family concept” in
aircraft design, and
hence the reason why aircraft manufacturers introduced families
of planes made up
of derivative jetliners built around a basic model, not single,
standardized models.7
The commercial aircraft industry, finally, gained from
technological innova-
tions in two other industries. More than any other
manufacturing industry, aircraft
construction benefited from advances in material applications
and electronics.
The development of metallic and nonmetallic composite
materials played a key
role in improving airframe and engine performance. On the one
hand, composite
materials that combined light weight and great strength were
utilized by aircraft
manufacturers; on the other, heat-resisting alloys that could
tolerate temperatures
of up to 3,000 degrees were used by engine makers. Similarly,
advances in elec-
tronics revolutionized avionics. The increasing use of
semiconductors by aircraft
manufacturers facilitated the miniaturization of cockpit
instruments, and more
important, it enhanced the use of computers for aircraft
communication, naviga-
tion, instrumentation, and testing.8 The use of computers
contributed, in addition,
to the design, manufacture, and assembly of new model aircraft.
THE BOEING COMPANY
The history of the Boeing company may be divided into two
15. bombers during World War II. During the jet age, beginning in
the 1950s, Boeing
had become the world’s largest manufacturer of commercial
aircraft, deriving
most of its revenues from selling jetliners.
Boeing’s first jet was the 707. The introduction of the 707 in
1958 repre-
sented a major breakthrough in the history of commercial
aviation; it allowed
Boeing to gain a critical technological lead over the Douglas
Aircraft Company,
its closer competitor. To benefit from government assistance in
developing the
707, Boeing produced the first jet in two versions: a military
tanker for the Air
Force (k-135) and a commercial aircraft for the airlines (707-
120). The company,
however, did not recoup its own investment until 1964, six
years after it delivered
the first 707, and twelve years after it had launched the
program. In the end, the
707 was quite profitable, selling 25 percent above its average
cost.9 Boeing
retained the essential design of the 707 for all its subsequent
narrow-body single-
aisle models (the 727, 737, and 757), introducing incremental
design improve-
ments, one at a time.10 One reason why Boeing used shared
design for future
models was the constant pressure experienced by the company
to move down the
learning curve and reduce overall development costs.
Boeing introduced the 747 in 1970. The development of the 747
represented
16. another breakthrough; the 747 wide body design was one of a
kind; it had no real
competition anywhere in the industry. Boeing bet the entire
company on the suc-
cess of the 747, spending on the project almost as much as the
company’s total net
worth in 1965, the year the project started.11 In the short-run,
the outcome was dis-
astrous. As Boeing began delivering its 747s, the company was
struggling to avoid
bankruptcy. Cutbacks in orders as a result of a deep recession,
coupled with pro-
duction inefficiencies and escalating costs, created a severe
cash shortage that
pushed the company to the brink. As sales dropped, the 747’s
break-even point
moved further and further into the future.
Yet, in the long run, the 747 program was a triumph. The Jumbo
Jet had
become Boeing’s most profitable aircraft and the industry’s
most efficient jetliner.
The plane helped Boeing solidify its position as the industry
leader for years to
come, leaving McDonnell Douglas far behind, and forcing the
Lockheed
Corporation to exit the market. The new plane, furthermore,
contributed to
Boeing’s manufacturing strategy in two ways. First, as Boeing
increased its
reliance on outsourcing, six major subcontractors fabricated 70
percent of the
value of the 747 airplane,12 thereby helping Boeing reduce the
project’s risks.
Second, for the first time, Boeing applied the family concept in
aircraft design to
19. ed
.
Boeing developed other successful models. In 1969, Boeing
introduced the
737, the company’s narrow-body flagship, and in 1982 Boeing
put into service
two additional jetliners, the 757 (narrow-body) and the 767
(wide-body). By
the early 1990s, the 737, 757, and 767 were all selling
profitably. Following the
introduction of the 777 in 1995, Boeing’s families of planes
included the 737 for
short-range travel, the 757 and 767 for medium-range travel,
and the 747 and 777
for medium- to long-range travel (Exhibit I).
In addition to building jetliners, Boeing also expanded its
defense, space, and
information businesses. In 1997, the Boeing Company took a
strategic gamble,
buying the McDonnell Douglas Company in a $14 billion stock
deal. As a result
of the merger, Boeing had become the world’s largest
manufacturer of military
aircraft, NASA’S largest supplier, and the Pentagon’s second
largest contractor
(after Lockheed). Nevertheless, despite the growth in its
defense and space busi-
nesses, Boeing still derived most of its revenues from selling
jetliners.
Commercial aircraft revenues accounted for 59 percent of
Boeing’s $49 billion
20. sales in 1997 and 63 percent of Boeing’s $56 billion sales in
1998.14
Following its merger with McDonnell, Boeing had one
remaining rival:
Airbus Industrie.15 In 1997, Airbus booked 45 percent of the
worldwide orders for
commercial jetliners16 and delivered close to 1/3 of the
worldwide industry output.
In 2000, Airbus shipped nearly 2/5 of the worldwide industry
output (Exhibit II).
Airbus’s success was based on a strategy that combined cost
leadership with
technological leadership. First, Airbus distinguished itself from
Boeing by incor-
porating the most advanced technologies into its planes.
Second, Airbus managed
to cut costs by utilizing a flexible, lean production
manufacturing system that
stood in a stark contrast to Boeing’s mass production system.17
The Boeing Company 101
Exhibit I. Total number of commercial jetliners delivered by the
Boeing
Company, 1958–2/2001a
Model No. Delivered First Delivery
B-707 1,010 (retired) 1958
B-727 1,831 (retired) 1963
B-737 3,901 1967
B-747 1,264 1970
B-757 953 1982
B-767 825 1982
23. .
http://www.Boeing.com/commercial/orders/index.html
As Airbus prospered, the Boeing company was struggling with
rising costs,
declining productivity, delays in deliveries, and production
inefficiencies. Boeing
Commercial Aircraft Group lost $1.8 billion in 1997 and barely
generated any
profits in 1998.18 All through the 1990s, the Boeing Company
looked for ways to
revitalize its outdated production manufacturing system on the
one hand, and
to introduce leading edge technologies into its jetliners on the
other. The devel-
opment and production of the 777, first conceived of in 1989,
was an early step
undertaken by Boeing managers to address both problems.
THE 777 PROGRAM
The 777 program was Boeing’s single largest project since the
completion of the
747. The total development cost of the 777 was estimated at
$6.3 billion and
the total number of employees assigned to the project peaked at
nearly 10,000.
The 777’s twin-engines were the largest and most powerful ever
built (the diam-
eter of the 777’s engine equaled the 737’s fuselage), the 777’s
construction
required 132,000 uniquely engineered parts (compared to
70,000 for the 767), the
24. 777’s seat capacity was identical to that of the first 747 that had
gone into service
in 1970, and its manufacturer empty weight was 57 percent
greater than the 767’s.
Building the 777 alongside the 747 and 767 at its Everett plant
near Seattle,
Washington, Boeing enlarged the plant to cover an area of
seventy-six football
fields.19
Boeing’s financial position in 1990 was unusually strong. With
a 21 percent
rate of return on stockholder equity, a long-term debt of just 15
percent of capi-
talization, and a cash surplus of $3.6 billion, Boeing could
gamble comfortably.20
There was no need to bet the company on the new project as had
been the case
with the 747, or to borrow heavily, as had been the case with
the 767. Still, the
decision to develop the 777 was definitely risky; a failure of the
new jet might
have triggered an irreversible decline of the Boeing Company
and threatened its
future survival.
102 PHILIP CONDIT AND THE BOEING 777
Exhibit II. Market share of shipments of commercial aircraft,
Boeing, McDonnell
Douglas (MD), Airbus, 1992–2000
1992 1993 1994 1995 1996 1997 1998 1999 2000
Boeing 61% 61% 63% 54% 55% 67% 71% 68% 61%
27. The decision to develop the 777 was based on market
assessment—the esti-
mated future needs of the airlines. During the fourteen-year
period, 1991–2005,
Boeing market analysts forecasted a +100 percent increase in
the number of
passenger miles traveled worldwide, and a need for about 9,000
new commercial
jets. Of the total value of the jetliners needed in 1991–2005,
Boeing analysts fore-
casted a $260 billion market for wide body jets smaller than the
747. An increas-
ing number of these wide-body jets were expected to be larger
than the 767.21
A CONSUMER-DRIVEN PRODUCT
To manage the risk of developing a new jetliner, aircraft
manufacturers had first
sought to obtain a minimum number of firm orders from
interested carriers, and
only then commit to the project. Boeing CEO Frank Shrontz had
expected
to obtain one hundred initial orders of the 777 before asking the
Boeing board to
launch the project, but as a result of Boeing’s financial strength
on the one hand,
and the increasing competitiveness of Airbus on the other,
Schrontz decided to
seek the board’s approval earlier. He did so after securing only
one customer:
United Airlines. On October 12, 1990, United had placed an
order for thirty-four
777s and an option for an additional thirty-four aircraft, and
28. two weeks later,
Boeing’s board of directors approved the project.22 Negotiating
the sale, Boeing
and United drafted a handwritten agreement (signed by Philip
Condit and Richard
Albrecht, Boeing’s executive vice presidents, and Jim Guyette,
United’s executive
vice president) that granted United a larger role in designing the
777 than the role
played by any airline before. The two companies pledged to
cooperate closely in
developing an aircraft with the “best dispatch reliability in the
industry” and the
“greatest customer appeal in the industry.” “We will endeavor
to do it right the first
time with the highest degree of professionalism” and with
“candor, honesty, and
respect” [the agreement read]. Asked to comment on the
agreement, Philip Condit,
said: “We are going to listen to our customers and understand
what they want.
Everybody on the program has that attitude.”23 Gordon
McKinzie, United’s 777 pro-
gram director agreed: “In the past we’d get brochures on a new
airplane and its
options. . . wait four years for delivery, and hope we’d get what
we ordered. This time
Boeing really listened to us.”24
Condit invited other airline carriers to participate in the design
and develop-
ment phase of the 777. Altogether, eight carriers from around
the world (United,
Delta, American, British Airways, Qantas, Japan Airlines, All
Nippon Airways,
and Japan Air System) sent full-time representatives to Seattle;
31. .
on the IPT [Integrated Product Teams], not service engineer(s).
One of the frus-
trations on the 747 was that we rarely got to talk to the
engineers who were doing
the work.”25
“We have definitely influenced the design of the aircraft,” a
United 777 man-
ager said, mentioning changes in the design of the wing panels
that made it eas-
ier for airline mechanics to access the slats (slats, like flaps,
increased lift on
takeoffs and landings), and new features in the cabin that made
the plane more
attractive to passengers.26 Of the 1,500 design features
examined by representa-
tives of the airlines, Boeing engineers modified 300 (see
Exhibit III). Among
changes made by Boeing was a redesigned overhead bin that left
more stand-up
headroom for passengers (allowing a six-foot-three tall
passenger to walk from
aisle to aisle), “flattened” side walls that provided the occupant
of the window
seat with more room, overhead bin doors that opened down and
made it possible
for shorter passengers to lift baggage into the overhead
compartment,
a redesigned reading lamp that enabled flight attendants to
replace light bulbs, a task
formerly performed by mechanics, and a computerized flight
deck management
32. 104 PHILIP CONDIT AND THE BOEING 777
External identification,
access panel
P assenger reading
light replaceability
Increased maximum landing
weight capability
Passenger seat
weight allowables
On-board engine
trim balance
Passenger system
gaseous oxygen option
Electronic bay
access hatch
Ceiling stowage
compartment at
doors 1 and 4
Cockpit dimmer
module location,
improved accessibility
More flight deck
stowage
33. Rain repellent-
hydrophobic coating
“Towbarless” tractor
nose gear design
Low priority messages
inhibit during takeoff
Refueling inclinometer
location
Dual external power
Quieter toilet seat
cover operation
Options for straight or
folding wing design
Improved pneumatic duct
leak detection system
Flat cabin
aisle floors
Crew rest with small cargo door
Fuselage size optimization
Improved
fatigue life
Engine/APU file
sensor connector
34. Longitudinal galley
option
Door 3 galley
capability
Translating ceiling
stowage bins
Nickel-plated fuel
tank wiring
Cargo restraint design
Improved hydraulic
tubing corrosion
protection
Interior
architectural
design
Cabin management
and in-flight
entertainment system
P ortable maintenance
access terminal
addition
Oxygen cylinder, commonality-
composite and steel
Airborne vibration
monitoring functionality
35. LRU access for maintainability
Refueling
panel location
Tire pressure
indication system
(primary)
Radial ply tires and
carbon brakes
(suppliers selection)
Carbon brake, dual
supply source
Improved hydraulic and wiring
systems separation
Exhibit III. The 777: Selected design features proposed by
Boeing airline
customers and adapted by the Boeing Company
Source: The Boeing Company.
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Kerzner, Harold, and Harold R. Kerzner. Project Management :
Case Studies, John Wiley & Sons, Incorporated, 2013.
ProQuest Ebook Central,
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108715.
Created from erau on 2018-08-21 12:00:56.
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system that adjusted cabin temperature, controlled the volume
of the public
address system, and monitored food and drink inventories.27
More important were changes in the interior configuration
(layout plan) of
the aircraft. To be able to reconfigure the plane quickly for
different markets
of varying travel ranges and passenger loads, Boeing’s
customers sought a flexi-
ble plan of the interior. On a standard commercial jet, kitchen
galleys, closets,
lavatories, and bars were all removable in the past, but were
limited to fixed posi-
tions where the interior floor structure was reinforced to
accommodate the “wet”
load. On the 777, by contrast, such components as galleys and
lavatories could be
38. positioned anywhere within several “flexible zones” designed
into the cabin by
the joint efforts of Boeing engineers and representatives of the
eight airlines.
Similarly, the flexible design of the 777’s seat tracks made it
possible for carriers
to increase the number of seat combinations as well as
reconfigure the seating
arrangement quickly. Flexible configuration resulted, in turn, in
significant cost
savings; airlines no longer needed to take the aircraft out of
service for an
extended period of time in order to reconfigure the interior.28
The airline carriers also influenced the way in which Boeing
designed the
777 cockpit. During the program definition phase,
representatives of United
Airlines, British Airways, and Qantas—three of Boeing’s clients
whose fleets
included a large number of 747-400s—asked Boeing engineers
to model the 777
cockpit on the 747-400s. In response to these requests, Boeing
introduced a
shared 747/777 cockpit design that enabled its airline customers
to use a single
pool of pilots for both aircraft types at a significant cost
savings.29
Additionally, the airline carriers urged Boeing to increase its
use of avionics
for in-flight entertainment. The 777, as a consequence, was
equipped with a fully
computerized cabin. Facing each seat on the 777, and placed on
the back of the
seat in front, was a combined computer and video monitor that
39. featured movies,
video programs, and interactive computer games. Passengers
were also provided
with a digital sound system comparable to the most advanced
home stereo avail-
able, and a telephone. About 40 percent of the 777’s total
computer capacity was
reserved for passengers in the cabin.30
The 777 was Boeing’s first fly by wire (FBW) aircraft, an
aircraft controlled
by a pilot transmitting commands to the moveable surfaces
(rudder, flaps, etc.)
electrically, not mechanically. Boeing installed a state of the art
FBW system on
the 777 partly to satisfy its airline customers, and partly to
challenge Airbus’ lead-
ership in flight control technology, a position Airbus had held
since it introduced
the world’s first FBW aircraft, the A-320, in 1988.
Lastly, Boeing customers were invited to contribute to the
design of the 777’s
engine. Both United Airlines and All Nippon Airlines assigned
service engineers to
work with representatives of Pratt and Whitney (P&W) on
problems associated
with engine maintenance. P&W held three specially scheduled
“airline confer-
ences.” At each conference, some forty airline representatives
clustered around a
A Consumer-Driven Product 105
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Exhibit IV. 777 supplier contracts
U.S. Suppliers of Structural Components
Astech/MCI Santa Ana, CA Primary exhaust cowl assembly
(plug
and nozzle)
Grumman Aerospace Bethpage, NY Spoilers, inboard flaps
Kaman Bloomfield, CT Fixed training edge
Rockwell Tulsa, OK Floor beams, wing leading edge slats
42. International Suppliers of Structural Components
AeroSpace Technologies of Australia Rudder
Australia
Alenia Italy Wing outboard flaps, radome
Embrace-Empresa Brasiera Brazil Dorsal fin, wingtip assembly
de Aeronautica
Hawker de Havilland Australia Elevators
Korean Air Korea Flap support fairings, wingtip assembly
Menasco Aerospace/ Canada/France Main and nose landing
gears
Messier-Bugatti
Mitsubishi Heavy Industries, Japan Fuselage panels and doors,
wing center
Kawasaki Heavy Industries, section wing-to-body fairing, and
and Fuji Heavy Industriesa wing in-spar ribs
Short Brothers Ireland Nose landing gear doors
Singapore Aerospace Singapore Nose landing gear doors
Manufacturing
U.S. Suppliers of Systems and Equipment
AlliedSignal Aerospace Torrance, CA Cabin pressure control
system, air
Company, AiResearch supply control system, integrated
Divisions system controller, ram air turbine
Bendix Wheels and South Bend, IN Wheel and brakes
Garrett Divisions Phoenix/Tempe, AZ Auxillary power unit
(APU),
43. air-driven unit
BFGoodrich Troy, OH Wheel and brakes
Dowly Aerospace Los Angeles, CA Thrust reverser actuator
system
Eldec Lynnwood, WA Power supply electronics
E-Systems, Montek Division Salt Lake City, UT Stabilizer trim
control module,
secondary hydraulic brake, optional
folding wingtip system
Honeywell Phoenix, AZ Airplane information management
Coon Rapid, MN system (AIMS), air data/inertial
reference system (ADIRS)
Rockwell, Collins Division Cedar Rapids, IA Autopilot flight
director system,
electronic library system (ELS)
displays
Sundstrand Corporation Rockford, IL Primary and backup
electrical power
systems
Teijin Seiki America Redmond, WA Power control units,
actuator control
electronics
United Technologies, Windsor Lock, CT Cabin air-conditioning
and temperature
Hamilton Standard control systems, ice protection
Division system
International Suppliers of Systems and Equipment
General Electric Company United Kingdom Primary flight
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A Family of Planes 107
full scale mock-up of the 777 engine and showed Pratt and
Whitney engineers gaps
in the design, hard-to-reach points, visible but inaccessible
parts, and accessible but
invisible components. At the initial conference, Pratt and
Whitney picked up 150
airline suggestions, at the second, fifty, and at the third, ten
more suggestions.31
A GLOBALLY MANUFACTURED PRODUCT
Twelve international companies located in ten countries, and
eighteen more U.S.
companies located in twelve states, were contracted by Boeing
to help manufac-
ture the 777. Together, they supplied structural components as
well as systems and
equipment. Among the foreign suppliers were companies based
in Japan, Britain,
Australia, Italy, Korea, Brazil, Singapore, and Ireland; among
the major U.S. sub-
contractors were the Grumman Corporation, Rockwell (later
merged with
Boeing), Honeywell, United Technologies, Bendix, and the
Sunstrand Corporation
(Exhibits IV and V). Of all foreign participants, the Japanese
47. played the largest
role. A consortium made up of Fuji Heavy Industries, Kawasaki
Heavy Industries,
and Mitsubishi Heavy Industries had worked with Boeing on its
wide-body mod-
els since the early days of the 747. Together, the three Japanese
subcontractors pro-
duced 20 percent of the value of the 777’s airframe (up from 15
percent of the
767s). A group of 250 Japanese engineers had spent a year in
Seattle working on
the 777 alongside Boeing engineers before most of its members
went back
home to begin production. The fuselage was built in sections in
Japan and then
shipped to Boeing’s huge plant at Everett, Washington for
assembly.32
Boeing used global subcontracting as a marketing tool as well.
Sharing design
work and production with overseas firms, Boeing required
overseas carriers to buy
the new aircraft. Again, Japan is a case in point. In return for
the contract signed
with the Mitsubishi, Fuji, and Kawasaki consortium—which was
heavily subsidized
by the Japanese government—Boeing sold forty-six 777
jetliners to three Japanese
air carriers: All Nippon Airways, Japan Airlines, and Japan Air
System.33
A FAMILY OF PLANES
From the outset, the design of the 777 was flexible enough to
accommodate deriv-
ative jetliners. Because all derivatives of a given model shared
50. .
The 777’s design flexibility helped Boeing manage the project’s
risks. Offering
a family of planes based on a single design to accommodate
future changes in cus-
tomers’ preferences, Boeing spread the 777 project’s risks
among a number of mod-
els all belonging to the same family.
The key to the 777’s design efficiency was the wing. The 777
wings, excep-
tionally long and thin, were strong enough to support vastly
enlarged models. The
first model to go into service, the 777-200, had a 209-foot-long
fuselage, was
designed to carry 305 passengers in three class configurations,
and had a travel
range of 5,900 miles in its original version (1995), and up to
8,900 miles in its
extended version (1997). The second model to be introduced
(1998), the 777-300,
108 PHILIP CONDIT AND THE BOEING 777
Exhibit V. The builders of the Boeing 777
Source: Jeremy Main, “Corporate Performance: Betting on the
21st Century Jet,” Fortune (April 20, 1992), p. 104.
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had a stretched fuselage of 242 feet (ten feet longer than the
747), was configured
for 379 passengers (three-class), and flew to destinations of up
to 6,800 miles
away. In all-tourist class configuration, the stretched 777-300
could carry as many
as 550 passengers.34
DIGITAL DESIGN
The 777 was the first Boeing jetliner designed entirely by
computers. Historically,
53. Boeing had designed new planes in two ways: paper drawings
and full-size mod-
els called mock-ups. Paper drawings were two dimensional and
therefore insuffi-
cient to account for the complex construction of the three
dimensional airplane.
Full-scale mock-ups served as a backup to drawings.
Boeing engineers used three classes of mock-ups. Made up of
plywood or
foam, class 1 mock-ups were used to construct the plane’s large
components in
three dimensions, refine the design of these components by
carving into the wood
or foam, and feed the results back into the drawings. Made
partly of metal, class
2 mock-ups addressed more complex problems such as the
wiring and tubing of
the airframe, and the design of the machine tools necessary to
cut and shape the
large components. Class 3 mock-ups gave the engineers one
final opportunity to
refine the model and thereby reduce the need to keep on
changing the design dur-
ing the actual assembly process or after delivery.35
Despite the engineers’ efforts, many parts and components did
not fit
together on the final assembly line but rather “interfered” with
each other, that is,
overlapped in space. The problem was both pervasive and
costly, Boeing engi-
neers needed to rework and realign all overlapping parts in
order to join them
together.
54. A partial solution to the problem was provided by the computer.
In the last
quarter of the twentieth century, computer aided design was
used successfully in
car manufacture, building construction, machine production,
and several other
industries; its application to commercial aircraft manufacturing
came later, both
in the United States and in Europe. Speaking of the 777, Dick
Johnson, Boeing
chief engineer for digital design, noted the “tremendous
advantage” of computer
application:
With mock-ups, the . . . engineer had three opportunities at
three levels of
detail to check his parts, and nothing in between. With Catia
[Computer
aided three dimensional, interactive application] he can do it
day in and day
out over the whole development of the airplane.36
Catia was a sophisticated computer program that Boeing bought
from
Dassault Aviation, a French fighter planes builder. IBM
enhanced the program to
improve image manipulation, supplied Boeing with eight of its
largest mainframe
Digital Design 109
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computers, and connected the mainframes to 2,200 computer
terminals that
Boeing distributed among its 777 design teams. The software
program showed on
a screen exactly how parts and components fit together before
the actual manu-
facturing process took place.37
A digital design system, Catia had five distinctive advantages.
First, it pro-
vided the engineers with 100 percent visualization, allowing
them to rotate,
zoom, and “interrogate” parts geometrically in order to spotlight
57. interferences.
Second, Catia assigned a numerical value to each drawing on
the screen and
thereby helped engineers locate related drawings of parts and
components, merge
them together, and check for incompatibilities. Third, to help
Boeing’s customers
service the 777, the digital design system created a computer
simulated human—
a Catia figure playing the role of the service mechanic—who
climbed into the
three dimensional images and showed the engineers whether
parts were service-
able and entry accessible. Fourth, the use of Catia by all 777
design teams in the
United States, Japan, Europe, and elsewhere facilitated
instantaneous communi-
cation between Boeing and its subcontractors and ensured the
frequent updating
of the design. And fifth, Catia provided the 777 assembly line
workers with
graphics that enhanced the narrative work instructions they
received, showing
explicitly on a screen how a given task should be performed.38
DESIGN-BUILD TEAMS (DBTs)
Teaming was another feature of the 777 program. About thirty
integrated-level
teams at the top and more than 230 design-build teams at the
bottom worked
together on the 777.39 All team members were connected by
Catia. The inte-
grated-level teams were organized around large sections of the
aircraft; the DBTs
around small parts and components. In both cases, teams were
58. cross-functional,
as Philip Condit observed:
If you go back . . . to earlier planes that Boeing built, the
factory was on the
bottom floor, and Engineering was on the upper floor. Both
Manufacturing
and Engineering went back and forth. When there was a problem
in the fac-
tory, the engineer went down and looked at it. . . .
With 10,000 people [working on the 777], that turns out to be
really
hard. So you start devising other tools to allow you to achieve
that—the
design-build team. You break the airplane down and bring
Manufacturing,
Tooling, Planning, Engineering, Finance, and Materials all
together [in
small teams].40
Under the design-build approach, many of the design decisions
were driven
by manufacturing concerns. As manufacturing specialists
worked alongside engi-
neers, engineers were less likely to design parts that were
difficult to produce and
needed to be redesigned. Similarly, under the design-build
approach, customers’
expectations as well as safety and weight considerations were
all incorporated
110 PHILIP CONDIT AND THE BOEING 777
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into the design of the aircraft; engineers no longer needed to
“chain saw”41 struc-
tural components and systems in order to replace parts that did
not meet cus-
tomers expectations, were unsafe, or were too heavy.
The design of the 777’s wing provides an example. The wing
was divided
into two integration-level teams, the leading-edge (the forward
part of the wing)
61. and the trailing-edge (the back of the wing) team. Next, the
trailing-edge team
was further divided into ten design-build teams, each named
after a piece of the
wing’s trailing edge (Exhibit VI). Membership in these DBTs
extended to two
groups of outsiders: representatives of the customer airlines and
engineers
employed by the foreign subcontractors. Made up of up to
twenty members, each
DBT decided its own mix of insiders and outsiders, and each
was led by a team
leader. Each DBT included representatives from six functional
disciplines: engi-
neering, manufacturing, materials, customer support, finance,
and quality assur-
ance. The DBTs met twice a week for two hours to hear reports
from team
members, discuss immediate goals and plans, divide
responsibilities, set time
lines, and take specific notes of all decisions taken.42
Described by a Boeing offi-
cial as little companies, the DBTs enjoyed a high degree of
autonomy from man-
agement supervision; team members designed their own tools,
developed their
own manufacturing plans, and wrote their own contracts with
the program man-
agement, specifying deliverables, resources, and schedules.
John Monroe, a
Boeing 777 senior project manager remarked:
The team is totally responsible. We give them a lump of money
to go and do
th[eir] job. They decide whether to hire a lot of inexpensive
people or to
62. trade numbers for resources. It’s unprecedented. We have some
$100 million
plus activities led by non-managers.43
Design-Build Teams (DBTs) 111
Exhibit VI. The ten DBTs (“little companies”) responsible for
the wing’s
trailing edge
● Flap Supports Team
● Inboard Flap Team
● Outboard Flap Team
● Flaperona Team
● Ailerona Team
● Inboard Fixed Wing and Gear Support Team
● Main Landing Gear Doors Team
● Spoilersb Team
● Fairingsc Team
aThe flaperon and aileron were movable hinged sections of the
trailing edge that helped the plane roll in flight. The
flaperon was used at high speed, the aileron at low speed.
bThe spoilers were the flat surfaces that lay on top of the
trailing edge and extended during landing to slow down
the plane.
cThe fairing were the smooth parts attached to the outline of the
wing’s trailing edge. They helped reduce drag.
Source: Karl Sabbagh, 21st Century Jet: The Making and
Marketing of the Boeing 777 (New York: Scribner, 1996),
p. 73.
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EMPLOYEES’ EMPOWERMENT AND CULTURE
An additional aspect of the 777 program was the empowering of
assembly line
workers. Boeing managers encouraged factory workers at all
levels to speak up,
offer suggestions, and participate in decision making. Boeing
managers also
paid attention to a variety of “human relations” problems faced
by workers,
problems ranging from childcare and parking to occupational
hazards and safety
65. concerns.44
All employees entering the 777 program—managers, engineers,
assembly
line workers, and others—were expected to attend a special
orientation session
devoted to the themes of team work and quality control. Once a
quarter, the
entire “777 team” of up to 10,000 employees met offsite to hear
briefings on
the aircraft status. Dressed casually, the employees were urged
to raise ques-
tions, voice complaints, and propose improvements. Under the
777 program,
managers met frequently to discuss ways to promote
communication with work-
ers. Managers, for example, “fire fought” problems by bringing
workers together
and empowering them to offer solutions. In a typical firefight
session, Boeing
777 project managers learned from assembly line workers how
to improve the
process of wiring and tubing the airframe’s interior: “staffing”
fuselage
sections with wires, ducts, tubs, and insulation materials before
joining
the sections together was easier than installing the interior parts
all at once in a
preassembled fuselage.45
Under the 777 program, in addition, Boeing assembly line
workers also were
empowered to appeal management decisions. In a case involving
middle man-
agers, a group of Boeing machinists sought to replace a
nonretractable jig (a large
66. device used to hold parts) with a retractable one in order to ease
and simplify their
jobs. Otherwise they had to carry heavy equipment loads up and
down stairs.
Again and again, their supervisors refused to implement the
change. When the
machinists eventually approached a factory manager, he
inspected the jig person-
ally, and immediately ordered the change.46
Under the 777 program, work on the shop floor was ruled by the
Bar Chart.
A large display panel placed at different work areas, the Bar
Chart listed the name
of each worker, his or her daily job description, and the time
available to com-
plete specific tasks. Boeing had utilized the Bar Chart system as
a “management
visibility system” in the past, but only under the 777 program
was the system
fully computerized. The chart showed whether assembly line
workers were meet-
ing or missing their production goals. Boeing industrial
engineers estimated the
time it took to complete a given task and fed the information
back to the system’s
computer. Workers ran a scanner across their ID badges and
supplied the com-
puter with the data necessary to log their job progress. Each
employee “sold”
his/her completed job to an inspector, and no job was declared
acceptable unless
“bought” by an inspector.47
112 PHILIP CONDIT AND THE BOEING 777
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LEADERSHIP AND MANAGEMENT STYLE
The team in charge of the 777 program was led by a group of
five vice presidents,
headed by Philip Condit, a gifted engineer who was described
by one Wall Street
analyst as “a cross between a grizzly bear and a teddy bear.
Good people skills, but
69. furious in the marketplace.”48 Each of the five vice presidents
rose through the ranks,
and each had a twenty-five to thirty years experience with
Boeing. All were men.49
During the 777 design phase, the five VPs met regularly every
Tuesday
morning in a small conference room at Boeing’s headquarters in
Seattle in what
was called the “Muffin Meeting.” There were no agendas
drafted, no minutes
drawn, no overhead projectors used, and no votes taken. The
homemade muffins
served during the meeting symbolized the informal tone of the
forum. Few peo-
ple outside the circle of five had ever attended these weekly
sessions. Acting as
an informal chair, Condit led a freewheeling discussion of the
777 project, asking
each VP to say anything he had on his mind.50
The weekly session reflected Boeing’s sweeping new approach
to manage-
ment. Traditionally, Boeing had been a highly structured
company governed by
engineers. Its culture was secretive, formal, and stiff. Managers
seldom interacted,
sharing was rare, divisions kept to themselves, and engineers
competed with each
other. Under the 777 program, Boeing made serious efforts to
abandon its secre-
tive management style. Condit firmly believed that open
communication among
top executives, middle managers, and assembly line workers
was indispensable for
improving morale and raising productivity. He urged employees
70. to talk to each
other and share information, and he used a variety of
management tools to do so:
information sheets, orientation sessions, question and answer
sessions, leadership
meetings, regular workers as well as middle managers, Condit
introduced a three-
way performance review procedure whereby managers were
evaluated by their
supervisors, their peers, and their subordinates.51 Most
important, Condit made
teamwork the hallmark of the 777 project. In an address titled
“Working Together:
The 777 Story” and delivered in December 1992 to members of
the Royal
Aeronautics Society in London,52 Condit summed up his team
approach:
[T]eam building is . . . very difficult to do well but when it
works the results
are dramatic. Teaming fosters the excitement of a shared
endeavor and cre-
ates an atmosphere that stimulates creativity and problem
solving. But build-
ing team[s] . . . is hard work. It doesn’t come naturally. Most of
us are taught
from an early age to compete and excel as individuals.
Performance in school
and performance on the job are usually measured by individual
achievement.
Sharing your ideas with others, or helping others to enhance
their perfor-
mance, is often viewed as contrary to one’s self interest.
This individualistic mentality has its place, but . . . it is no
longer the most
73. THE RESULTS OF THE 777 PROJECT
The 777 entered revenue service in June 1995. Since many of
the features incor-
porated into the 777’s design reflected suggestions made by the
airline carriers,
pilots, mechanics, and flight attendants were quite enthusiastic
about the new jet.
Three achievements of the program, in airplane interior, aircraft
design, and air-
craft manufacturing, stood out.
Configuration Flexibility
The 777 offered carriers enhanced configuration flexibility. A
typical configura-
tion change took only seventy-two hours on the 777 compared
to three weeks in
competing aircraft. In 1992, the Industrial Design Society of
America granted
Boeing its Excellence Award for building the 777 passenger
cabin, honoring an
airplane interior for the first time.53
Digital Design
The original goal of the program was to reduce “change, error,
and rework” by 50
percent, but engineers building the first three 777s managed to
reduce such modifi-
cation by 60 percent to 90 percent. Catia helped engineers
identify more than 10,000
interferences that would have otherwise remained undetected
until assembly, or
until after delivery. The first 777 was only 0.023 inch short of
perfect alignment,
compared to as much as 0.5 inch on previous programs.54
74. Assembly line workers
confirmed the beneficial effects of the digital design system.
“The parts snap
together like Lego blocks,” said one mechanics.55 Reducing the
need for reengi-
neering, replanning, retooling, and retrofitting, Boeing’s
innovative efforts were rec-
ognized yet again. In 1993, the Smithsonian Institution honored
the Boeing 777
division with its Annual Computerworld Award for the
manufacturing category.56
Empowerment
Boeing 777 assembly line workers expressed a high level of job
satisfaction under
the new program. “It’s a whole new world,” a fourteen-year
Boeing veteran
mechanic said, “I even like going to work. It’s bubbly. It’s
clean. Everyone has
confidence.”57 “We never used to speak up,” said another
employee, “didn’t dare.
Now factory workers are treated better and are encouraged to
offer ideas.”58
Although the Bar Chart system required Boeing 777 mechanics
to work harder
and faster as they moved down the learning curve, their
principal union organi-
zation, the International Association of Machinists, was pleased
with Boeing’s
new approach to labor–management relations. A union
spokesman reported
that under the 777 program, managers were more likely to treat
problems as
114 PHILIP CONDIT AND THE BOEING 777
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opportunities from which to learn rather than mistakes for
which to blame. Under
the 777 program, the union representative added, managers were
more respectful
of workers’ rights under the collective bargaining agreement.59
UNRESOLVED PROBLEMS AND LESSONS LEARNED
77. Notwithstanding Boeing’s success with the 777 project, the cost
of the program
was very high. Boeing did not publish figures pertaining to the
total cost of Catia.
But a company official reported that under the 777 program, the
3D digital design
process required 60 percent more engineering resources than the
older, 2D
drawing-based design process. One reason for the high cost of
using digital
design was slow computing tools: Catia’s response time often
lasted minutes.
Another was the need to update the design software repeatedly.
Boeing revised
Catia’s design software four times between 1990 and 1996,
making the system
easier to learn and use. Still, Catia continued to experience
frequent software prob-
lems. Moreover, several of Boeing’s outside suppliers were
unable to utilize
Catia’s digital data in their manufacturing process.60
Boeing faced training problems as well. One challenging
problem, according
to Ron Ostrowski, director of 777 engineering, was “to convert
people’s thinking
from 2D to 3D. It took more time than we thought it would. I
came from a paper
world and now I am managing a digital program.”61 Converting
people’s thinking
required what another manager called an “unending
communication” coupled
with training and retraining. Under the 777 program, Ostrowski
recalled, “engi-
neers had to learn to interact. Some couldn’t, and they left. The
78. young ones
caught on” and stayed.62
Learning to work together was a challenge to managers, too.
Some managers
were reluctant to embrace Condit’s open management style,
fearing a decline in their
authority. Others were reluctant to share their mistakes with
their superiors, fearing
reprisals. Some other managers, realizing that the new approach
would end many
managerial jobs, resisted change when they could, and did not
pursue it wholeheart-
edly when they could not. Even top executives were sometimes
uncomfortable with
Boeing’s open management style, believing that sharing
information with employ-
ees was likely to help Boeing’s competitors obtain confidential
777 data.63
Teamwork was another problem area. Working under pressure,
some team
members did not function well within teams and had to be
moved. Others took
advantage of their newborn freedom to offer suggestions, but
were disillusioned
and frustrated when management either ignored these
suggestions, or did not act
upon them. Managers experienced different team-related
problems. In several
cases, managers kept on meeting with their team members
repeatedly until they
arrived at a solution desired by their bosses. They were
unwilling to challenge
senior executives, nor did they trust Boeing’s new approach to
teaming. In other
81. drawing, ignoring
the computerized design, and causing unnecessary and costly
delays in his team’s
part of the project.64
Extending the 777 Revolution
Boeing’s learning pains played a key role in the company’s
decision not to imple-
ment the 777 program companywide. Boeing officials
recognized the importance
of team work and Catia in reducing change, error, and rework,
but they also real-
ized that teaming required frequent training, continuous
reinforcement, and ongo-
ing monitoring, and that the use of Catia was still too
expensive, though its cost
was going down (in 1997, Catia’s “penalty” was down to 10
percent). Three of
Boeing’s derivative programs, the 737 Next Generation, the
757-300, and the 767-
400, had the option of implementing the 777’s program
innovations, and only one,
the 737, did so, adopting a modified version of the 777’s cross-
functional teams.65
Yet the 777’s culture was spreading in other ways. Senior
executives took
broader roles as the 777 entered service, and their impact was
felt through the
company. Larry Olson, director of information systems for the
747/767/777 divi-
sion, was a former 777 manager who believed that Boeing 777
employees “won’t
tolerate going back to the old ways.” He expected to fill new
positions on
Boeing’s next program—the 747X—with former 777 employees
82. in their for-
ties.66 Philip Condit, Boeing CEO, implemented several of his
own 777’s inno-
vations, intensifying the use of meeting among Boeing’s
managers, and
promoting the free flow of ideas throughout the company. Under
Condit’s lead-
ership, all mid-level managers assigned to Boeing Commercial
Airplane Group,
about sixty people, met once a week to discuss costs, revenues,
and production
schedules, product by product. By the end of the meeting—
which sometimes ran
into the evening—each manager had to draft a detailed plan of
action dealing with
problems in his/her department.67 Under Condit’s leadership,
more important,
Boeing developed a new “vision” that grew out of the 777
project. Articulating
the company’s vision for the next two decades (1996–2016),
Condit singled out
“Customer satisfaction,” “Team leadership,” and “A
participatory workplace,” as
Boeing’s core corporate values.68
CONCLUSION: BOEING, AIRBUS, AND THE 777
Looking back at the 777 program twelve years after the launch
and seven years
after first delivery, it is now (2002) clear that Boeing produced
the most success-
ful commercial jetliner of its kind. Airbus launched the A330
and A340 in 1987,
116 PHILIP CONDIT AND THE BOEING 777
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and McDonnell Douglas launched a new 300-seat wide body jet
in the mid 1980s,
the three-engine MD11. Coming late to market, the Boeing 777
soon outsold both
models. The 777 had entered service in 1995, and within a year
Boeing delivered
more than twice as many 777s as the number of MD11s
delivered by McDonnell
85. Douglas. In 1997, 1998, 1999, and 2001, Boeing delivered a
larger number of
777s than the combined number of A330s and A340s delivered
by Airbus (Exhibit
VII). A survey of nearly 6,000 European airline passengers who
had flown both
the 777 and the A330/A340 found that the 777 was preferred by
more than three
out of four passengers.69 In the end, a key element in the 777’s
triumph was its
popularity with the traveling public.
NOTES
1. Rodgers, Eugene. Flying High: The Story of Boeing (New
York: Atlantic
Monthly Press, 1996), 415–416; Michael Dornheim, “777
Twinjet Will Grow
to Replace 747-200,” Aviation Week and Space Technology
(June 3, 1991): 43.
2. “Commercial Airplanes: Order and Delivery,
Summary,” http/www.
boeing.com/commercial/orders/index.html. Retrieved from Web,
February 2,
2000.
3. Donlon, P. “Boeing’s Big Bet” (an interview with CEO Frank
Shrontz), Chief
Executive (November/December 1994): 42; Dertouzos, Michael,
Richard
Lester, and Robert Solow, Made in America: Regaining the
Productive Edge
(New York: Harper Perennial, 1990), 203.
4. John Newhouse, The Sporty Game (New York: Alfred Knopf,
86. 1982), 21, but
see also 10–20.
5. Mowery, David C., and Nathan Rosenberg. “The Commercial
Aircraft
Industry,” in Richard R. Nelson, ed., Government and
Technological Progress:
Notes 117
Exhibit VII. Total number of MD11, A330, A340, and 777
airplanes delivered dur-
ing 1995–2001
1995 1996 1997 1998 1999 2000 2001
McDonnell Douglas/ 18 15 12 12 8 4 2
Boeing MD11
Airbus A330 30 10 14 23 44 43 35
Airbus A340 19 28 33 24 20 19 20
Boeing 777 13 32 59 74 83 55 61
Source: For Airbus, Mark Luginbill Airbus Communication
Director, February 1, 2000, and March 11, 2002. For
Boeing, The Boeing Company Annual Report, 1997, p. 35,
1998, p. 35; “Commerical Airplanes: Order and Delivery,
Summary,”
http//www.boeing.com/commercial/order/index.html. Retreived
from Web, February 2, 2000, and March
9, 2002.
c02.qxd 12/21/12 5:35 PM Page 117
Kerzner, Harold, and Harold R. Kerzner. Project Management :
Case Studies, John Wiley & Sons, Incorporated, 2013.
89. 8. Mowery and Rosenberg, “The Commercial Aircraft Industry,”
102–103,
126–128.
9. Rae, John B. Climb to Greatness: The American Aircraft
Industry,
1920–1960 (Cambridge, Mass.: MIT Press, 1968), 206–207;
Rodgers, Flying
High, 197–198.
10. Spadaro, Frank. “A Transatlantic Perspective,” Design
Quarterly (Winter
1992): 23.
11. Rodgers, Flying High, 279; Newhouse, Sporty Game, Ch. 7.
12. Hochmuth, M. S. “Aerospace,” in Raymond Vernon, ed., Big
Business and
the State (Cambridge: Harvard University Press, 1974), 149.
13. Boeing Commercial Airplane Group, Announced Orders and
Deliveries as of
12/31/97, Section A 1.
14. The Boeing Company 1998 Annual Report, 76.
15. Formed in 1970 by several European aerospacc firms, the
Airbus Consortium
had received generous assistance from the French, British,
German, and
Spanish governments for a period of over two decades. In 1992,
Airbus had
signed an agreement with Boeing that limited the amount of
government
funds each aircraft manufacturer could receive, and in 1995, at
long last,
90. Airbus had become profitable. “Airbus 25 Years Old,” Le
Figaro, October
1997 (reprinted in English by Airbus Industrie); Rodgers,
Flying High, Ch.
12; Business Week (30 December 1996): 40.
16. Charles Goldsmith, “Re-engineering, After Trailing Boeing
for Years, Airbus
Aims for 50% of the Market,” Wall Street Journal (March 16,
1998).
17. “Hubris at Airbus, Boeing Rebuild,” Economist, 28
(November 1998).
18. The Boeing Company 1997 Annual Report, 19; The Boeing
Company 1998
Annual Report, 51.
19. Donlon, “Boeing’s Big Bet,” 40; John Mintz, “Betting It All
on 777”
Washington Post (March 26, 1995); James Woolsey, “777: A
Program of New
Concepts,” Air Transport World (April 1991): 62; Jeremy Main,
“Corporate
Performance: Betting on the 21st Century Jet,” Fortune (April
20, 1992),
104; James Woolsey, “Crossing New Transport Frontiers,” Air
Transport
World (March 1991): 21; James Woolsey, “777: Boeing’s New
Large
Twinjet,” Air Transport World (April 1994): 23; Michael
Dornheim,
“Computerized Design System Allows Boeing to Skip Building
777
Mockup,” Aviation Week and Space Technology (June 3, 1991):
51; Richard
93. 1992), 102–103.
22. Rodgers, Flying High, 416, 420–424.
23. Richard O’Lone and James McKenna, “Quality Assurance
Role was Factor
in United’s 777 Launch Order,” Aviation Week and Space
Technology
(October 29, 1990): 28–29; Air Transport World (March 1991):
20.
24. Quoted in the Washington Post (March 25, 1995).
25. Quoted in Bill Swectman, “As Smooth as Silk: 777
Customers Applaud the
Aircraft’s First 12 Months in Service,” Air Transport World
(August 1996):
71, but see also Air Transport World (April 1994): 24, 27.
26. Quoted in Fortune (April 20, 1992), 112.
27. Rodgers, Flying High, 426; Design Quarterly (Winter 1992):
22; Polly Lane,
“Boeing Used 777 to Make Production Changes,” Seattle Times
(May 7,
1995).
28. Design Quarterly (Winter 1992): 22; The Boeing Company,
Backgrounder:
Pace Setting Design Value-Added Features Boost Boeing 777
Family (May
15, 1998).
29. Boeing, Backgrounder, (May 15, 1998); Sabbagh, 21st
Century Jet, p. 49.
30. Karl Sabbagh, 21st Century Jet: The Making and Marketing
of the Boeing
94. 777 (New York: Scribner, 1996), 264, 266.
31. Sabbagh, 21st Century Jet, 131–132
32. Air Transport World (April 1994): 23; Fortune (April 20,
1992), 116.
33. Washington Post (March 26, 1995); Boeing Commercial
Airplane Group,
777 Announced Order and Delivery Summary...As of 9/30/99.
34. Rodgers, Flying High, 420–426; Air Transport World (April
1994): 27, 31;
“Leading Families of Passenger Jet Airplanes,” Boeing
Commercial Airplane
Group, 1998.
35. Sabbagh, 21st Century Jet, 58.
36. Quoted in Sabbagh, 21st Century Jet, 63.
37. Aviation Week and Space Technology (June 3, 1991): 50,
(October 12, 1992),
p. 49; Sabbagh 21st Century Jet, p. 62.
38. George Taninecz, “Blue Sky Meets Blue Sky,” Industry
Week (December 18,
1995); 49–52; Paul Proctor, “Boeing Rolls Out 777 to Tentative
Market,”
Aviation Week and Space Technology (October 12, 1992): 49.
39. Aviation Week and Space Technology (April 11, 1994): 37;
Aviation Week and
Space Technology (June 3, 1991): 35.
40. Quoted in Sabbagh, 21st Century Jet, 68–69.
41. This was the phrase used by Boeing project managers
working on the 777.
97. 44. Richard O’Lone, “777 Revolutionizes Boeing Aircraft
Development
Process,” Aviation Week and Space Technology (June 3, 1992):
34.
45. O. Casey Corr. “Boeing’s Future on the Line: Company’s
Betting its Fortunes
Not Just on a New Jet, But on a New Way of Making Jets,”
Seattle Times
(August 29, 1993); Polly Lane, “Boeing Used 777 to Make
Production
Changes, Meet Desires of Its Customers,” Seattle Times (May 7,
1995);
Aviation Week and Space Technology (June 3, 1991): 34.
46. Seattle Times (August 29, 1993).
47. Seattle Times (May 7, 1995, and August 29, 1993).
48. Quoted in Rodgers, Flying High, 419–420.
49. Sabbagh, 21st Century Jet, 33.
50. Sabbagh, 21st Century Jet, 99.
51. Dori Jones Young, “When the Going Gets Tough, Boeing
Gets Touchy-Feely,
Business Week (January 17, 1994): 65–67; Fortune (April 20,
1992), 117.
52. Reprinted by The Boeing Company, Executive
Communications, 1992.
53. Boeing, Backgrounder (May 15, 1998).
54. Industry Week (December 18, 1995): 50–51; Air Transport
World (April
1994).
55. Aviation Week and Space Technology (April 11, 1994): 37.
98. 56. Boeing, Backgrounder, “Computing & Design/Build Process
Help Develop
the 777.” Undated.
57. Seattle Times (August 29, 1993).
58. Seattle Times (May 7, 1995).
59. Seattle Times (August 29, 1993).
60. Glende, “The Boeing 777: A Look Back,” 1997, 10; Air
Transport World
(August 1996): 78.
61. Air Transport World (April 1994): 23.
62. Washington Post (March 26, 1995).
63. Seattle Times (May 7, 1995); Rodgers, Flying High, 441.
64. Seattle Times (May 7, 1995); Rodgers, Flying High, 441–
442.
65. Glende, “The Boeing 777: A Look Back,” 1997, 10.
66. Air Transport World (August 1996), 78.
67. “A New Kind of Boeing,” Economist (January 22, 2000),
63.
68. “Vision 2016,” The Boeing Company 1997.
69. “Study: Passengers Voice Overwhelming Preference for
Boeing 777,
http/www.boeing.com/news/releases/1999. Retrieved from Web
11/23/99.
120 PHILIP CONDIT AND THE BOEING 777
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Case Studies, John Wiley & Sons, Incorporated, 2013.
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